Month: April 2014

Michael Snyder
Economic Collapse
April 30, 2014
No, the economy is most definitely not “recovering”. Despite what you may hear from the politicians and from the mainstream media, the truth is that the U.S. economy is in far worse shape than it was prior to the last recession.

Image: U.S. Dollars (Wiki Commons).
In fact, we are still pretty much where we were at when the last recession finally ended. When the financial crisis of 2008 struck, it took us down to a much lower level economically. Thankfully, things have at least stabilized at this much lower level. For example, the percentage of working age Americans that are employed has stayed remarkably flat for the past four years. We should be grateful that things have not continued to get even worse. It is almost as if someone has hit the “pause button” on the U.S. economy. But things are definitely not getting better, and there are a whole host of signs that this bubble of false stability will soon come to an end and that our economic decline will accelerate once again. The following are 17 facts to show to anyone that believes that the U.S. economy is just fine…
#1 The homeownership rate in the United States has dropped to the lowest level in 19 years.
#2 Consumer spending for durable goods has dropped by 3.23 percent since November. This is a clear sign that an economic slowdown is ahead.
#3 Major retailers are closing stores at the fastest pace that we have seen since the collapse of Lehman Brothers.
#4 According to the Bureau of Labor Statistics, 20 percent of all families in the United States do not have a single member that is employed. That means that one out of every five families in the entire country is completely unemployed.
#5 There are 1.3 million fewer jobs in the U.S. economy than when the last recession began in December 2007. Meanwhile, our population has continued to grow steadily since that time.

by John Rubino on April 27, 2014 · 9 comments
It’s not easy being a mainstream economist. You spend your life building models that become your professional identity. And when those models fail to describe and predict reality, you’re left wondering about the meaning of it all.

The latest case in point is US housing. Keynesian economic models say that if you lower mortgage rates you get more houses bought, sold and built. A nice, simple piece of cause and effect. But today’s mortgage rates are at levels that would have incited a buying frenzy a generation ago, employment is rising — and home sales, home building and mortgage originations are all flat-lining.

Zero Hedge and Automatic Earth recently posted good discussions of the current state of the housing market. See:

Both articles conclude that housing is weak and getting weaker. But the real question is what this means for the rest of the economy. Is housing a discrete sector dealing with its own supply/demand issues, or is it a sign of things to come for consumer spending, government tax revenues, and business investment?

The argument for the latter scenario is based on the idea that newly-created currency pouring into the financial system pumps up asset prices, which convinces people that they’re rich enough to indulge in new cars, new clothes and nice vacations — and more stocks, bonds and houses.

But this “wealth effect” only works when the amount of debt in the system is low enough for new paper profits to change behavior. If people already carry too much debt, then they don’t feel comfortable borrowing even at historically low interest rates, and inflated asset prices become harder and harder to support. Either they stall or start moving lower, which shifts the wealth effect into reverse and sucks the air out of the economy.

Each quarter, when we perform our regular update on trends in US homeownership and rents using Census Bureau data, we say that “The American Homeownership Dream is officially dead. Long live the New Normal American Dream: Renting.” One thing we added in 2013 is that the American Dream has now officially became a full-blown nightmare after mortgage rates exploded, even if declining modestly afterward, and in the process pummeling the affordability of housing as well as grounding any new mortgage-funded transactions to a complete halt (don’t believe us – just ask the tens of thousands of mortgage brokers let go by the TBTF banks in the past 6 months) while sending mortgage origination activity to record lows. Which is why it was not at all surprising to find that the just updated Q1 homeownership rate was 64.8% – the lowest in 19 years!

Furthermore, even as household formation has continued to implode (more on that in a subsequent post) despite the shrill promises of housing bulls who still have to realize that the transitory pick up in home prices has nothing to do with organic growth or a stable consumer, and all to do with the Fed’s balance sheet, the now effectively finished REO-To-Rent program, and illegal offshore cash parked in the US, Americans have to live somewhere. That somewhere is as renters of Wall Street and other landlords. As the next chart shows, the median asking rent has soared to fresh records and hitting an all time high of $766 as of the first quarter.

According to shocking new numbers that were just released by the Bureau of Labor Statistics, 20 percent of American families do not have a single person that is working. So when someone tries to tell you that the unemployment rate in the United States is about 7 percent, you should just laugh. One-fifth of the families in the entire country do not have a single member with a job. That is absolutely astonishing. How can a family survive if nobody is making any money?

Well, the answer to that question is actually quite easy. There is a reason why government dependence has reached epidemic levels in the United States. Without enough jobs, tens of millions of additional Americans have been forced to reach out to the government for help. At this point, if you can believe it, the number of Americans getting money or benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million.

When I was growing up, it seemed like anyone that was willing to work hard could find a good paying job. But now that has all changed. At this point, 20 percent of all the families in the entire country do not have a single member that has a job. That includes fathers, mothers and children. The following is how CNSNews.com broke down the numbers…
A family, as defined by the BLS, is a group of two or more people who live together and who are related by birth, adoption or marriage. In 2013, there were 80,445,000 families in the United States and in 16,127,000—or 20 percent–no one had a job.

The economy will decline in the USA following 2015.75 and will have several important impacts that will shape our future. The Big Bang is inevitable – YES! The outcome is to be determined. This is why I do what I do. I too have a family and fear for their future. I am not 23, so my shelf time is expiring thank God so I do not have to live in this age of tyranny too long. Nevertheless, all I can do is try to educate as many people for if they understand how things work, then when it comes time for the rebuilding, perhaps we can choose freedom over more authoritarian-tyranny. I have not charged money to read this blog for fortunately I do not have to work for money. Nor have I restricted access forcing registration to keep this as open as possible. I do not even frustrate you with advertising. So my concerns are for our future – not to sell bullshit, gold coins, or investment products. This is far more important. Unfortunately, the primary impact will be.
The USA is the only economy holding up the entire world right now. GDP Growth is collapsing everywhere from Europe, Russia, and into China. Once the USA turns down, the civil unrest will rise in the USA as well. The Occupy Wall Street was a dress rehearsal.
Governments will find it increasingly harder to sell their debt. This trend has already hit both China and Russia. We will see it hit Europe, Japan and then the USA. This will drive the trend to raise taxes further as governments will assume that they need to restore confidence within their debt structures. As they do this, the global economy will turn downward into a spiral vortex.
While governments claim to be mad at the NSA, behind the curtain there is legal swapping going on. Foreign nations are using the NSA to gather data for taxes on their own citizens while denying they spy on their own people yet get that info from the NSA. In return, the NSA allows the British to spy on Americans so the NSA can deny it is doing so domestically and then swaps the info. Germany and Switzerland also participate in this domestic spying for taxes.
The G20 agreement to swap all financial info to hunt down international capital is all about getting tax revenue to sustain the debt structure. There is no long-term planning here and they cannot see that they are creating the next MAJOR GREAT DEPRESSION to make all previous downturns loop like speed-bumps. I reported that even I could not wire $15,000 for expenses to Asia in advance. HSBC refused to accept the wire for they could not guarantee I had no ownership in the account the wire was directed. I had to write a check. You cannot even do business because these people are hunting all capital and PRESUME any transaction over $3,000 is to hide money – not for commerce.
Government will not collapse. This early stage will be about fighting hard to sustain their power. War is part of that. International War takes place either to fill the treasury with the spoils of war and or power as was in the good old days (Putin’s ideas), or the more modern version to act as a distraction to deflect civil unrest (USA to come) and to unleash the dogs of war to settle old scores (China v Japan, North v South Korea, Russia v West).

Americans are completely detached from reality living “behind the CNN curtain,” deems Max Keiser, the host of RT’s ‘Keiser Report.’ While 95 percent of the world’s population is happily moving on, building new post-America future, Americans and their leaders appear comically out of the loop.

Referring to a 2003 German tragicomedy film ‘Good Bye, Lenin!’ Keiser compares Americans to the people living in East Germany before the Berlin Wall came down, who were gradually losing touch with the outside world.
“The reason being: they watch CNN and actually believe CNN’s narrative about Russian advances into Ukraine, the sanctity of Wall St., and the wholesomeness of American culture as a ‘shining city on a hill’ as Ronald Reagan called it,” stresses Max Keiser in his RT Op-Ed “Living behind the CNN curtain.”
According to the expert, the words of the US leaders appear to come from a distant past, a previous era of US moral and political hegemony, when the American middle class had stable financial positions, when America’s press freedom was not as low as the 46th place of the Reporters Without Borders league table, and when the population of US prisons had not yet reached more than 2 million people.
In the past 15 years the income gap between the average American family and “the new robber barons of Wall Street” has grown enormously. Meanwhile, BRIC nations of the East and ‘Global South’ were rising, due to the fact they possessed the resources and capital to determine their own political and economic destiny.
“Since China joined the WTO, we’ve witnessed a de-globalization in terms of a breakaway from the dominant ideology of the 20th century that drove American soft power and global hegemony. Instead of a unipolar world, we’ve seen a fracturing and a move away from the ‘freedom and democracy’ meme emanating from Washington DC .,” writes Max Keiser.
The expert notes that he would like to see the US as a world leader that doesn’t use military power, drones and political repressions as the key instruments of its foreign and domestic policy. It would be nice, he writes, to not feel embarrassed every time a John McCain, John Kerry or Hillary Clinton speaks in public.
Max Keiser asks a rhetorical question: “Will the US ever, ‘tear down that CNN wall’ as Reagan may have put it, and rejoin the world community?”
“In the meantime, watch RT and see what the other 95 percent are up to,” recommends the RT host.
Read more: http://voiceofrussia.com/news/2014_04_28/US-leaders-citizens-completely-detached-from-reality-living-behind-CNN-curtain-expert-0283/

Imagine this:
You do your research and you choose a retreat property far off the beaten path. You spend time and money developing it, making it your own. Maybe it is a vacation home, or maybe you’re a prepper and this is your bug-out location. Regardless of the reason you chose it, it’s yours, so maybe you plant some perennial vegetables and some fruit trees. You dig a well or locate a spring. You make it your own.
Then the government comes along and says, “Nope, we want this land – you’re out.”
And they just take it, evicting you like they are the landlord and you are merely a tenant, despite your name on the deed.
That’s exactly what happened to a couple in Colorado. Andy and Ceil Barrie fought the government and the government won.
The Barries had purchased an idyllic 10-acre parcel of land in the midst of the White River National Forest. The private land had on it a rustic cabin, an outhouse, and an old boarded-up gold mine. It was a day use cabin, and therefore totally off the grid. No electricity, no plumbing – just peace and solitude, accessible only by an ATV via a road that Summit County didn’t even know existed. The cabin is 1.2 miles off the main road. From a preparedness standpoint, the place is what most of us dream of – a sweet little piece of paradise far off the beaten path, without a powerline in sight.
The government used many different bizarre strategies to get the Barries off of their land. Pay close attention, because precedents are being set that could affect hunters or those creating bug-out retreats.

#1 ATV access threatened an endangered species
The government’s first line of attack against the Barries was forbidding them to use a motorized vehicle to reach the property. This will sound familiar to anyone who has been following the Cliven Bundy case in Nevada: Summit “county officials issued a report that stated ‘public motorized access’ to the property threatened the alpine tundra and the habitat for the lynx, an endangered species.” (source) County officials took a vote in October of 2013, and in order to save the lynx threatened by the Barries’ occasional access, agreed that their property should be seized. (In the case of the Bundy ranch, his cattle were massacred by the government while they claimed to be concerned about the fate of the desert tortoise.)
#2 The county demanded that “various commercial activities” be halted
And exactly what nefarious money-making schemes were the Barries up to? Why, Andy Barrie had the audacity to gather up fallen pine cones and take them home for his Christmas wreath-making business. He used a cart attached to the aforementioned ATV to take them back to his home, where the wreaths were created.
#3 The county condemned the cabin because of electrical and plumbing issues
Umm…it’s an off-grid cabin, so there was no electricity and no plumbing to start with. In their haste to protect the environment, one would think that bringing in electricity or plumbing would be far more of an issue than a low-carbon-footprint place that used no public utilities.This was strictly a day-use cabin, thus requiring no plumbing or power. How many off-grid homes that adjoin national land exist across the country right now? How many hunting and trapping cabins are snugly sitting out there in the wilderness? Are all of those properties next on the government’s list of properties to steal?
#4 The cabin was in violation of zoning laws
A previous owner had expanded the cabin without a permit. Because we have to ask the government’s permission for everything, you see.
In the end, the government won.
On Thursday, the Barries had no option but to cede the land. The government paid them $115,000 for it. They had spent $75,000 waging a legal defense. Ceil Barrie said in a statement:
The cabin was condemned on the grounds of plumbing and electricity, when it doesn’t even have plumbing or electricity. All those things added up in my mind. This is ridiculous, we can never win and our money is not unlimited. I have two kids in college this year. To me, what just came out of it is, you can’t fight the government. (source)
The moral to this story is, the government does not support the lifestyle to which many of us aspire. Self sufficiency and freedom from the grid are not celebrated, but demonized. The government, through various agencies masquerading as do-gooders, have waged war on woodstoves, off-grid lifestyles, front yard vegetable gardens, and anything that might allow you to live without their daily input or without being subject to their many taxes and fees.
Private property rights are ignored and, according to the government, we must all submit to their “eminent domain”. What it boils down to: You might think you own something, but it’s clear that it is only yours until the government decides that they want it.